Tax Software Revisited – The Pros and Cons of Doing It Yourself

Facts: Tax Software Is Cheap. You Get What You Pay For.

Tax software is marketed beautifully. TV ads show customers just pushing a button on a smart phone to reduce their taxes. With an IRS code of over 74,000 pages, the idea of tax simplicity is utterly seductive. Tax software is also cheap. It is also a lot quicker answering their fundamental questions than to read instructions on the IRS tax forms.

If You Can Handle It, Your Tax Software Can Handle It

A return prepared using tax software is only as accurate as the information you enter into it.

In some situations, tax software provides advantages over doing it yourself. Tax payers with simple returns; those who are single, don’t own a home and have no itemized deductions (most 1040EZ filers) can prepare a simple return accurately using tax software that also allows them to conveniently e-file their return.

Tax software is cheap, but it may not save you time. It takes hours to navigate through the software and answer all the questions. Using a tax professional can save you far more time.

Marriage And Houses And Kids, Oh My!

As your life gets complicated so will your taxes, and using tax software for preparing your returns will get more and more risky.

Are you sure you are taking every deduction you are entitled? When you get married, and your family and assets grow, are you confident that your software can evaluate your circumstances and provide you the maximum tax benefit? You cannot – because the tax software assumes you know that information already.

In complicated situations, it can give you the applicable tax code for you to make the decision, but – didn’t you buy the tax software to avoid reading IRS regulations?

When you e-file your return, do you know if that return is accurate? You will have to sign the return and verify it is accurate to the IRS. If a mistake leads to an audit, you can use (at a cost) one of their “specialists”. He will know nothing about you or how you prepared your return. Or perhaps you can represent yourself using your own tax knowledge in front of an IRS auditor who, our experience shows, often do not understand their own regulations.

If It Only Had A Brain… Like Your Tax Pro

No matter which software you use, your return will miss the expertise of a tax professional who ensures you are taking all the tax advantages you are entitled. The professionals at Incompass always evaluate your personal expenses and find exceptions in the tax code that can reduce your taxes now and in the future.

Finally, these common tax situations are so complex that they should never be placed in the hands of over the counter tax software:

Income levels that approach Alternative Minimum Tax (AMT).

Income from foreign investments.

Working in one state and living in another, and

Capital gains from sales of assets.

These always need a tax professional to navigate you through the complexities and maximize the benefits.

Avoid tax software. Our tax experts at Incompass look forward to saving you time and stress by preparing your tax returns with insight and accuracy; giving you confidence that you’ve paid the lowest tax or received the highest refund possible. Click to contact the tax professionals at Incompass today.